Apple has announced that its Buy Now, Pay Later (BNPL) solution is in beta testing among Apple employees and is set to be soon available to the public in the US. The offering, set to be entitled Apple Pay Later, was initially announced at the Worldwide Developers Conference 2022 as a feature of iOS 16, looking to enable customers to pay in instalments by having the option selected in the Wallet app when purchasing something with Apple Pay.

The initial expectation was for the feature to be introduced late in 2022, however, this was delayed, and Apple CEO Tim Cook has now confirmed that the Apple Pay Later payment method is set to be ‘launching soon’. Apple Pay Later developments and features As detailed in the announcement, Apple’s CEO did not provide a specific date for the launch, however, the company is expected to release iOS 16. 4 and other software updates in the spring, and the belief is that the first betas of the new software might potentially be released in the weeks to come.

Apple Pay Later was initially delayed as the company was reported to have been facing significant technical and engineering challenges in rolling out the service, with the belief at the time having been that the feature will not arrive ahead of the iOS 16. 4 release. When talking about US-based consumers, the Apple Pay Later functionality is thought to be an ‘interesting’ addition, as it is set to have zero interest and no fees applied.

As per the company’s description highlighted in the 9to5Mac announcement, the service is set to enable Apple Pay Later users with a simplified and secure way to have the cost of an Apple Pay purchase split into four equal payments spread over the course of six weeks. The service is built into the Apple Wallet and designed with the users’ financial health in mind and enables the viewing, tracking, and repaying of Apple Pay Later payments in an easy manner, directly within the Wallet. Furthermore, users will be able to apply for Apple Pay Later whenever they are checking out with either Apple Pay, or in Wallet, with the service set to be available wherever Apple Pay is accepted online or in-app, leveraging the Mastercard network.

Rise in D2C BNPL offerings Direct-to-consumer BNPL offerings have seen an increase predominantly in Asia, where a multitude of players have recently announced either a proprietary offering or a partnership with a BNPL provider. In January 2023 alone, payment acquirer GHL announced a continuation of the roll-out of Grab’s BNPL service for its Malaysia-based in-store merchants. Concomitantly, the Philippines-based consumer finance app BillEase announced a partnership with Alipay+ to enable consumers from the region to leverage BNPL when shopping online.

In December 2022, Walmart announced that it was preparing for the launch of its BNPL system that was set to be offered through its own fintech venture, even though it had already been offering BNPL services in collaboration with Affirm. On the other side, in the US, the BNPL space is increasingly looking to be regulated, and bigtechs have been facing challenges in issuing their own instalment offering. One of the biggest concerns around the offering, apart from the issue related to consumer debt, is that of the access to consumer data that bigtechs might have when entering the BNPL space.

That is one of the predominant reasons why Apple has been investigated by the Consumer Financial Protection Bureau (CFPB) into anti-trust and privacy concerns for Apple Pay Later. The worry for Apple and other bigtech companies is that they could combine consumer purchase information with personal information of the likes of health data, geolocation history, or browsing history. The concern is that without regulation, these enterprises could exploit data and their position within the ecommerce industry.

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